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Court rules against Chesterfield in sales tax lawsuit

By: Jim Erickson


A Cole County circuit court judge has ruled against the city of Chesterfield in its lawsuit challenging the constitutionality of a state law governing how sales tax revenues are distributed.

In a decision handed down late in November, Judge Jon E. Beetem ruled against Chesterfield and Mayor Bob Nation’s request for a partial summary judgment on two counts of the lawsuit. At the same time, the judge sustained a countering summary judgment motion requested by the defendants on all four counts of the legal action.

Sales tax paid in Chesterfield Valley will continue to be divided out of St. Louis County’s tax pool.

Chesterfield and Nation had filed the lawsuit in 2014 naming the state and its director of revenue as defendants. Subsequently, St. Louis County and the cities of Ballwin, Florissant, Manchester, University City, Webster Groves and Wildwood intervened on the side of the defendants.

At issue was legislation passed years ago establishing rules on how sales tax revenues would be distributed among municipalities in counties with a given size of population. From a practical standpoint, the method applied only to St. Louis County, a point the lawsuit claimed was unconstitutional because it violated state provisions forbidding special laws.

Beetem rejected that claim, as well as other arguments Chesterfield and Nation raised in support of their complaint.

Nation long has claimed the sales tax distribution in St. Louis County is unfair because it takes away revenue from municipalities that have worked to promote economic development and gives it to other communities without a strong retail base.

In the process, the system has propped up many local governments that couldn’t exist otherwise, leaving Chesterfield with inadequate income to pay for the added law enforcement and other infrastructure costs needed in the aftermath of economic development efforts, Nation has said.

Legislation approved and signed into law last year altered the sales tax distribution formula somewhat. While Nation applauded that development as a step in the right direction, he felt more change was needed.

The court’s decision did not come up during the Chesterfield City Council’s Dec. 4 meeting, but the council went into closed session after the regular meeting ended.

In later comments to West Newsmagazine, Nation explained the sales tax case was discussed during the closed-door session but that no final decision had been reached as to the city’s future actions.

“We concluded we should think about the issue, digest what was said in the ruling, evaluate our options and then collectively determine what our best course of action should be,” the mayor said.

Under the state’s sunshine law, discussion of pending legal matters is one of a limited number of topics public governing bodies are permitted to discuss in closed session.

Ballwin’s Tim Pogue, mayor of one of the cities that intervened on behalf of the defendants said, “I am pleased with the ruling from this case.  I hope that Chesterfield will accept the ruling and the tax structure that is currently in place. We monitor the effects of any change to the pool tax structure and will continue to fight for the best interests of not just Ballwin but for the St. Louis region.”

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